1.2.1 Solution architecture

SAP Entitlement Management is a public cloud solution based on the SAP Cloud Platform. It is a multi-tenant SaaS offering and can be deployed as part of any system architecture. SAP Entitlement Management offers a flexible entitlement modeling instrument to create and track the entitlement of any product, service, warranty, license, training, digital content, etc. It is also a central repository of entitlements which provides a 360-degree view of entitlement statuses in order to track consumption/usage. In addition, it provides a history (including audit trails), eliminates churn, drives upsell and cross-sell opportunities for business growth, minimizes risk, and drives compliance.

SAP Entitlement Management supports integration with the following SAP solutions:

• Order Management in SAP S/4HANA on-premise
• SAP Subscription Billing
• SAP Commerce Cloud
• SAP Analytics Cloud for Reporting
• SAP BRIM / Subscription Order Management
• SAP S/4 HANA Cloud Order Management

In addition to the standard integration scenarios listed above, SAP Entitlement Management provides unified integration with other order management, licensing, provisioning, consumption, service, and fulfillment systems via publicly available Application Programming Interfaces (APIs). The solution architecture consists of three main modules, as shown in Figure 1.1.

Figure 1.1: Solution architecture

The modules are:

1. Entitlement Modeling—in this module, you can define new entitlements and later assign them to different offerings.

2. Entitlement Lifecycle Management—this module enables you to keep track of entitlement activities such as status changes, bumps, splits, version changes, renewals, etc.

3. Entitlement Repository—this module is the central hub of the solution, in which current and historical information about customers, entitlements, and products can be easily viewed.

Let’s now explore the high-level solution architecture of SAP Entitlement Management. We will start with the sales order creation process. You can create sales orders either from SAP Order Management or from a non-SAP system such as Salesforce. Master data such as customer, product, and transaction data (e.g., sales order, product quantity, etc.) is replicated by calling APIs via SAP Cloud Integration to SAP Entitlement Management. As per the configuration in SAP Entitlement Management—such as the product offering, entitlement configuration, and defined rules—the entitlements are created and captured in the entitlement repository of the solution. Later, if any downstream processes are available, such as license key generation, cloud provisioning or hardware fulfillment, such entitlements will initiate triggers to other systems for downstream processes. As you can see in Figure 1.1, communication is not just one-directional APIs can be set up to receive data from external sources such as usage/consumption information, software keys and other updates required for the entitlement record.

1.2.2 Solution benefits

SAP Entitlement Management offers many benefits, including some very useful Fiori applications. Some of the solution features are as follows:

• Entitlement modeling—you can freely define any type of new entitlement model such as support, license, training, warranty, device-dependent models, etc. You can also maintain a custom set of attributes such as business categories, rights, distribution channels, units, and geolocations, and assign entitlement models to offerings.
• Entitlement lifecycle management—you can define how events affecting entitlements should be processed. Upsell, renewal, return, upgrade, split, and bump processes are all supported. You can define custom alerts, and maintain entitlement statuses.
• Central repository—you have up-to-date visibility of entitlements that have been defined in entitlement modeling and related product offering assignments. There is a highly scalable repository that can grow and adapt to business requirements. Within the solution, you can access a complete history of any entitlement.
• Reporting and analytics—you can report by customer, product, entitlement, and custom-defined criteria. In addition, you can also obtain insight into current, past, and expiring entitlements through a user-friendly dashboard. Finally, you can track the changes in entitlements from origination to consumption.
• Entitlement generation rules—you can use standard and custom-defined sets of rules to initiate, validate, or override default system behavior when updating and creating entitlements.
• Integration—the solution offers out-of-the-box integration with S/4HANA on-premise order management and, using available APIs, you can also integrate with other SAP or non-SAP systems.
• Visibility of sales, support, and customers—the solution enables you to simulate entitlements at quotation level. You can automate the renewal process with co-termination logic. In addition, via APIs, you can enable self-service scenarios and custom views for sales, support, and customers.
• Empower partners and partner management—the solution supports the functionality to handle third parties who are responsible for entitlement fulfillment and to maintain the third party at entitlement document level. There is an API enhancement to handle third party functionalities, enabling them to manage entitlements themselves.
• Event framework—the solution provides a comprehensive functionality to define business events. It supports functionality to trigger follow-on processes/actions when events are triggered, as well as functionality to monitor triggered events and statuses of the actions.
• Advanced consumption management—the solution enables updates and deletion of consumption information via a user interface and APIs. It tracks changes in the consumption records, searches entitlements with consumption attributes, and triggers outbound interfaces when a consumption record is changed.
• Integration with master data management (MDM)—the solution supports integration with the MDM system. You can configure and maintain different source systems for sales (from where the sales originated), offerings, and customer data, as well as perform enhancements in the query and master data APIs.
• Enhanced entitlement operations—the solution supports split functionality whereby you can split an entitlement document into multiple entitlements. You can export all entitlements as CSV files and customize the number of entitlements displayed per page. You can monitor the transport of configuration across systems. It also offers a new user interface to directly create an entitlement, as well as maintain sales events that trigger entitlement updates.
• Services to support B2B scenarios—the solution provides various APIs. These enable you to generate multiple entitlements, to generate entitlement models, to maintain model-to-offering mapping, to “push” product and customer master data from the source system, to transfer entitlements across customers, etc.

In Chapter 2, we will walk through the basic concepts of entitlement models, and we will examine the end-to-end entitlement lifecycle, the entitlement rules setup, and how to create and update customer entitlements.

2 Entitlement models

In this chapter, we provide an overview of SAP Entitlement Management and where it fits in the quote-to-cash process.

Before we jump into the details of the SAP Entitlement Management service, it is important to understand the bigger picture and the major interconnecting points. As shown in Figure 2.1, SAP Entitlement Management typically needs information from external systems, as follows:

• Master data—(e.g., customer and product information) from either SAP S/4HANA or a master data governance system.
• Transaction data—(e.g. sales order information) from S/4HANA.

Figure 2.1: Major components and interconnecting points

At the same time, the following customization is required within SAP Entitlement Management to utilize the above information and enable efficient modeling and management of entitlements:

• Products from external systems need to be mapped to the “offering” in SAP Entitlement Management.
• Sales orders from external systems need to be mapped to “customer entitlements” in SAP Entitlement Management.

To link the offering (master data) and the customer entitlement (transactional data) together, customization for the entitlement model needs to be performed. We will discuss the concept of entitlement models and associated subcomponents in the following sections.